1.22.2007

McDonald's Tests Pepsi Products
According to an article in today's Atlanta Journal-Constitution, McDonald's fast-food chain is experimenting with bottled Pepsi beverages in College Station, Texas, and metro Kansas City. It states that a nine-month beverage test, which features Pepsi's Mountain Dew, Gatorade, Propel Fitness Water, Lipton tea and Tropicana Pure Premium juice products, shows there is a demand for these products -- challenging Coca-Cola's more than 50-year relationship with McDonald's.

While the article states it is "unlikely" Pepsi will win McDonald's Coke contract any time soon, if the test rolls more widely, it could "chip away" at Coke's fountain business.

According to McDonald's spokeswoman Danya Proud, the company has been encouraged by what its heard from customers, but it is still continuing to weigh test results and whether to expand the tests.

Matthew Reilly, a Chicago-based stock analyst for Morningstar summed it up, by saying that consumers are looking for the brands they know, wherever they want them. Because of that, he said in in the article, "It's not going to be, 'Coke IS the only thing,' anymore."

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